What amount of gain or loss will be recorded by rocky

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Problem

Rocky Company trades equipment with a book value of $24,970 for new equipment with a list price of $103,850. $77,880 cash is paid and there is a $25,970 trade-in allowance. There is a well established market for the old equipment traded in. The fair market value of the old equipment is $23,970. What amount of gain or loss will be recorded by Rocky?

a)$25,970
b)$0 gain or loss
c)$1,000 loss
d)$1,000 gain
e)None of the other alternatives are correct.

Reference no: EM131789324

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